Skip to main content

Are we past inherently political economic stimulus decisions?

If ever there were examples of inherently political economic decisions, the current recession has brought them out. Take Cash for Clunkers, for instance. Bottom line: $2.877 billion cash pumped directly into car dealerships. Or, how about the home buyer’s tax credit? Bottom line: The housing industry gets a $1.5 billion boost from the $8,000 tax credit first-time home buyers get this year. The credit, dollar for dollar, will be paid to taxpayers even if they owe no tax or the credit is more than any tax owed.

You’ll love this one. Economic stimulus money is being spent to train hairstylists and nail technicians in, for example, the Tampa, Fla. area where the hairstyling industry says there are few job opportunities. But, the funds to learn how to craft a French braid are flowing into local beauty schools, for some more than $1 million this year. Bottom Line: A largesse being lavished on beauty schools and a clip job for taxpayers!

Is it boating’s turn now? Is our industry finally being viewed as politically important enough to get some help? That depends on how you define help. Last week, President Obama called for legislation to: (1) Increase the size of SBA 7(a) loans used for dealer floorplan financing from $2 million to $5 million; (2) Increase the size of SBA 504 loans for purchase/expansion of physical plants from $2 million to $5 million for standard borrowers (supporting a total project of $12.5 million) and from $4 million to $5 million for manufacturers (supporting a total project of $13.75 million); and (3) Increase the size of microloans (loans that can fund daily operations) from $35,000 to $50,000.

The President is recognizing that the recovery will be stunted until credit is available to small businesses like ours. This latest announcement is welcomed, if overdue. But, let’s get real here. To assume that this will have the mojo to actually help us is questionable. So far, the existing 7(a) floorplan loan program has been a bust. Talk about a fiddling SBA program while Rome burned . . . we’ve had a whole string section!

So far, this announcement fails to address the total lack of participation by banks in SBA’s program. In fact, I am aware of only one dealer (Randy Wattenbarger) who commented last August 4 to this blog that he was within 3-6 weeks of getting an SBA- backed floorplan loan. (Note: Since comments to this blog do not reveal email addresses, if you’re still a reader, Randy, please comment again and tell us what happened.)

It’s abundantly clear that if the President and SBA really want this expanded program to go this time, a lot more incentives must be offered to the banks to get them to increase their lending to our industry or to get involved with SBA loans at all. Indeed, even ideas including direct lending by SBA and attractive cash incentives to buyers (“Bucks for Boats”) should be on the table now. It’s time for less politics and more direct stimulation of small businesses like ours.

Related

1_PULSE1

Inflation Stymies Boat Sales

Inventories of new and used boats are improving at the retail level but are still considered comparatively lean, according to the results of the monthly Pulse Report survey.

Norm

Ho, Ho, Ho, You Better Watch Out

It may be too early to decorate the showroom, but it’s not too early to hatch a marketing plan to profit from the holiday selling season.

IBEX

Industry reacts to IBEX cancelation

With Ian expected to hit Florida’s west coast as a major hurricane, the consensus among those who spoke with Trade Only Today say it was the correct decision.

1_ABYCELECTRIFICATION

Ready for a Revolution

Electrification has been an increasingly common buzzword in the marine industry, especially in the past four to five years.

1_MARINEMAX.BOD

MarineMax Makes Appointment to its Board

Mercedes Romero has expertise in global procurement and strategic planning, working with such companies as Procter & Gamble and Starbucks.

1_ PULSE.PING.1

DEALERS: Are Interest Rates Impacting Demand?

This month’s Pulse Report survey asks dealers whether interest rate increases are causing a downturn in boat sales. Take the survey here.

1_SPOTZERO

Spot Zero Announces Expansion

The Fort Lauderdale-based reverse osmosis systems manufacturer is adding a 20,000-square-foot production facility.

1_Seakeeper Ride 450_2023 Sportsman Open 232 Center Console

Seakeeper’s New System Targets Pitch

Seakeepeer, whose gyroscopic stabilizers set the marine industry standard for eliminating as much as 95 percent of a boat’s roll, is now turning its attention to eliminating pitch with their Seakeeper Ride system.

7_IMG_0254

Propeller Precision

Yamaha’s new $20 million foundry produces about 100,000 propellers a year